KUCHING: Genting Malaysia Bhd (Genting) failed to win the casino license in upstate New York as the state board chose three developers that excluded any bids in Orange and Ulster counties.
Winners of the New York upstate casino bids are Montreign Resort Casino (owned by Empire Resorts); Rivers Casino (owned by Capital Region Gaming LLC) and Lago Resort and Casino (owned by Wimorite Inc).
None of the six bids in Orange county were awarded as the board reasoned that it would hurt gambling sites already built close to NY City. The recommended winners will still need approval by the Gaming Commission and must complete a background check by the State Police and all environmental reviews.
“We are disappointed that Genting Malaysia did not win any of the licences,” opined an analyst with CIMB Investment Bank Bhd (CIMB Research) on the news, noting thatEmpire Resorts (listed on NASDAQ) is 50 per cent owned by the Lim family, through Kien Huat Realty and operates the Monticello Casino & Raceway in New York.
“However, we do not think that Genting Malaysia’s share price will react negatively as consensus had not imputed any realised net asset value contribution from upstate New York.”
On the other end of the spectrum, Kenanga Investment Bank Bhd (Kenanga Research) in a separate note said this piece of news does not bode well for Genting at the time when sentiment of share price already hurt by overall bad market sentiment.
“As such, it may negatively impact price movement in the immediate term, albeit no changes in fundamental,” it said.
“Nonetheless, its existing racino facility at Aqueduct in the New York City should give them a platform for future venture in the New York State or other part of US should opportunity arises. We are keeping our FY14-FY15 estimates unchanged for now.”
The team at Maybank Investment Bank Bhd (Maybank Research) also left its earnings estimates unchanged for Genting.
“We maintain our buy call on Genting Malaysia as we still like its Genting Integrated Tourism Plan (GITP). GITP involves investing RM5 billion to build, amongst others, a 1,300-room three-star hotel (completion by mid-2015), 20th Century Fox World theme park (completion by late-2016) and two new hotels with 2,300 rooms (completion by 2018).”